Federal Reserve Note, a promise to pay! Value ?
American Silver Eagle .999 % fine silver.
Silver may very well be the most exciting investment of several lifetimes. Historically when silver advances it can be spectacular. Did you know that from July 1, 2003 through October 25, 2006 the DOW was up 34%. Gold increased in value 69.3% but Silver increased in value 158.5%. This move in silver may be just a hint of what is to come. Is this the time for you to own silver? Is Silver just now starting to gain steam?
The majority of people usually wait for a spectacular move in a stock or commodity before investing. Witness the .com boom of the 90's. The silver market as yet to witness a large influx in investment money into silver. Is this the time to buy and own silver?
Silver mining is insufficient to meet demand and has been for about 18 years. In 1990 the estimated silver bullion inventories, worldwide, stood at about 2.4 billion ounces. By 1994 it stood at 1.6 billion ounces, 1998: 800 million ounces. 2002: 400 million ounces, 2006: 200 million ounces. Today, there are no known large stockpiles of silver in existence on this planet. This represents and unprecedented demand for silver.
Will the demand go down? Probably not, because of the demand for silver for it's ever increasing use. More and more uses are being discovered daily. More patents are issued every year for silver then any other metal. Do you own silver?
The demand for silver increases but the amount mined yearly decreases. Where does the difference come from? Above ground supplies which are being depleted ,or are depleted, which is putting the squeeze on the price and a back log in orders. Will this accelerate the price of silver in the future? North West Territorial Mint is backlogged eight to twelve weeks for silver as of February of 2009.
What is the appeal of silver right now? It has the potential for an upside move that could put the price through the roof. What is the argument for gold vs. silver? History has shown that almost all of the gold produced is still around. While the bulk of the silver mined is consumed, it is gone and not recoverable.
This may be a unique opportunity for many people to make a lot of money; owning silver is a hedge against inflation against the declining dollar. The price of silver will go up; supply and demand will determine its price. Anyone can determine the daily price of silver and receive daily silver reports via the internet.
The overhanging surplus of silver available in the 1980's has been taken out of the market and used up, it is gone. In order to get more silver into the market the price has to appreciate. Demand exceeds supply; the surplus of silver is gone, which creates the perfect storm for silver. Do you own silver?
While silver is in fact in short supply it creates the perfect case for an increase in the price. The modern world is more and more dependant on silver and its unique properties. Silver has proven itself to be indispensible. It is used in every digital product, cameras, phones, computers, the health industry, the list is endless. It has proven to be one of the most conductive of metals. In retrospect this is a relatively new industry and is growing daily. Electronics and electrical applications are the largest consumer of silver.
Silver is being used in superconductive wire, which is wrapped in silver. Superconductivity is unique to silver. Around 1990 35% of the silver was used for industry. Today that figure is around 56% an increase in demand of about 21% for just industry. In 2005 there were 864.5 million ounces of silver mined throughout the world.
The uniqueness of silver is that it is a precious metal and industrial metal. It tends to follow the price of gold and is a safe haven against inflation. Silver has the wind behind it and the price will have to appreciate because of demand.
World wide growth and the Southeast Asian factor, especially China will affect the price of silver. It is a critical commodity for world wide growth and experts around the world predict the continued growth of demand.
The growth of the economy in China is nothing but spectacular as people move from homes with dirt floors to living in three story homes with all of the amenities of the West. These homes require plumbing, electricity, heat and other commodities, silver being right in the mix. Moving 1.3 billion people into modern day living is consuming vast amounts of commodities, like copper, steel, coal, aluminum and silver. South East Asia is experiencing tremendous growth in industry, manufacturing and infrastructure.
The demand for electronics, appliances, air conditioners are unprecedented with 98% of these consumables being produced in China for their people, with vast amounts being shipped abroad. This unfortunate situation can be blamed on U.S. trade agreements, which have stripped our country of its manufacturing base. Is their growth just beginning? South East Asia and India will demand huge resources as their unprecedented growth picks up steam. This demand will put a huge dent in silver stockpiles. Their economies are moving from an agriculture base to a manufacturing base as did the U.S. in the late 1800's and early 20th century.
Currently the demand for silver in North America is far greater then that of the rest of the world, but it will not take long for them to catch up, putting a further strain on commodities. At this time in history with silver in such short supply and the demand growing daily, is it any wonder that silver is showing strength in the market.
Another compelling case for owning your own supply of silver is the declining value of the dollar. America has already experienced the stock "bubble", the housing "bubble" and a bunch of other "bubbles". No one seems to be talking about the debt "bubble", actually this can not be described as a "bubble" it should be described as a "balloon". Let's explore this for a minute. The government has a published debt approaching twelve (12) trillion dollars not including unfunded social programs, pensions, etc. Frankly I have no clue how a nation can be 12 trillion dollars in debt if that much money does not even exist in the country. Some estimate, with all of the unfunded junk out there that the national debt is approaching 50 TRILLION dollars. Their answers print more fiat money.
Throughout history countries who debase their money and use paper money as a medium of exchange fail. Paper money becomes worth less and worth less and then becomes worthless. In section 8, of the United States Constitution, paragraph 5, the power is vested in the Congress to coin Money, regulate the value thereof, and of foreign Coin, and fix the Standard of Weights and Measures. Have you ever asked your self what is the weight of a $1.00 bill as compared to a $100.00 bill? There is no difference except what is printed on the bill. Now try this, lay your hand on a 1/8 ounce, ¼ ounce, one half ounce and a one ounce piece of gold or silver. Can you tell the difference? Wonder why the congress does not following the wise words of the founding fathers? It is no wonder that the dollar has lost 96% of its value in the last 95 years.
In the 1970's silver prices was about $2.00 per ounce. In the 1980's silver went to $50.00 per ounce. Same ounce of silver, it just took more dollars to buy that same ounce of silver. Why? Inflation! Did the silver become worth more or did the paper money become worth less? At $50.00 per ounce there was 1.5 billion more ounces of silver available in the market. Today silver is trading at about $17.00, with a whole lot less of it available.
Have you ever wondered how there can be about one trillion dollars of paper money available, but almost 11 trillion dollars in national debt? The United States now relies on foreign nations to loan us money for our I.O.U.'s in the form of treasury bills, notes and other junk. How long will it take for this "balloon" to burst?
People are rushing from the stock market to precious metals and are putting increasing pressure on supplies. People fear for their financial future as the value of the dollar continues its steep decline. We are looking for a store of value and we are not finding it in paper money. Silver has outpaced gold, stocks, bonds and has been an outstanding investment. Do you own silver?
Think of this comparison: some people think of gold as an Olympic size swimming pool and think of silver as a child wading pool. It only takes a little bit of water to raise the level of the wading pool, but it takes a lot of water to raise the level of the water in an Olympic size pool. I could not think of a better analogy of the difference between gold and silver.
Is the dollar buying you the same amount of goods or service that it did 5 year ago, 2 year ago? Have you noticed an increase in utility costs, food costs, we have experienced $4.00 plus per gallon of gas, will it come back? Did you lose money in the stock market in the last couple of years, or see a decrease in the value of your home? Are you working more and saving less, do you really believe that inflation in the United States is 2%. Inflation is robbing us of our wealth. We are transferring our money out of this country for foreign made goods and oil at unprecedented rates. The value of the dollar is in a steep decline and our government has the answer, print more fiat money.
What happens if silver makes its big move back to a historic ratio to gold of about 16-1. A little history here, in 1914 the silver to gold ratio was 41-1. By the end of WW I the ratio was 15-1. In 1941 it was 96-1. In 1967 it was 16-1. By 1975 it was 40-1, 1979 14-1. In 2003 it was 77-1 and today it is at 70-1.
The current silver market may be one of the greatest investments of several lifetimes. If silver makes its move to 15-1 at today's prices it would be about $62.00 per ounce. The beauty of silver today is that it is affordable at $13.00 per ounce. If you purchased 100 ounces of silver today for about $1500.00 and it moves to $50.00 per ounce, you would make about $3500.00 or about 230% on your investment.
Why own silver today? It is recognized worldwide as real money. It is in high demand and has been cheap for so long that most people expect it to stay that way. Remember two words when investing in silver: Supply and Demand.
Will the outlook for silver be positive for 2years, 5 years, 10 or 20 years? No one can predict this, but history tells us that it is ready for a move on the upside. Something to think about, go out and buy 100 ounces of silver, take it home, stash it away and go to bed at night. When you wake up in the morning, ask yourself is 100 ounces enough, if you think it is not, go buy more until you are comfortable. This is the real power of silver!
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